Over seven million dollars owed to the government written off ‘for accounting purposes’

The 18th Assembly pass the first reading of the four Constitution Amendment Bills yesterday

The controversial Public Revenues Write-off bill 2022 was passed by eight members of the Fono Ekepule at its final sitting for 2022.

The bill was introduced under the certificate of urgency which means that the first, second, and third reading of the bill must be done at this meeting, essentially providing a write-off ‘for accounting purposes’ over seven million dollars owed to the government by individuals, businesses, and state-owned enterprises. 

There are two separate schedules, one with $1.2 million dollars owed by individuals or debtors, some of whom are either deceased or have moved overseas.

The following table is in relation to the write-off of certain debts being treated as irrecoverable, losses to be written off for the five-year period ended June 30 2021, a total of $1,243,248.00

Debts owing to the GovernmentAmount
In relation to Niue Power$509,102
In relation to Bulk Fuel$507,368
In relation to income tax$137,265
Miscellaneous and travel debts$89,513
Write-off of debts owing to the Government

Over six million dollars is owed to the government by some of its entities or state-owned entities.

The following table is in relation to the write-off of the government’s investment in the specified entities following an impairment assessment of the entities as at 30 June 2021, the assessment completed by the Government of Niue with the assistance of Deloitte.

Specified entityAmount
Broadcasting Corporation of Niue$344,552
Niue Philatelic and Numismatic Corporation$3,550,348
Telecom Niue Limited$2,168,044
Write-offs in the value of the Government’s investments in specified entities

The bill was presented by the Minister of Finance Hon. Crossley Tatui explained that this is the only option available to the government in order for the government to commence the audit of its future annual accounts by clearing the debts accumulated over the past five years that the government officials were not able to collect or recover. 

Minister Tatui said that substantial resources have been deployed to ensure the government’s public financial management systems are in order going forward. 

The process had already started in the middle of last year when the Fono Ekepule, passed the Public Revenues Financial Reporting and Audit Special Provisions Amendment Act 2022 to amalgamate and compile five sets of outstanding annual accounts into one set of accounts to be audited. 

The last sitting of the Fono Ekepule was attended by only ten members, just meeting the quorum but not all members supported the bill. The member for Makefu Tofua Puletama and Common Roll member O’love Jacobsen questioned why there were no proper reports from the Niue government, Deloittes, and Audit NZ to explain the situation properly to the representatives of the people of Niue. 

Common Roll Member O’love Jacobsen said that they as elected representatives owed it to the people to explain better why the government is writing off $7 million dollars

Jacobsen said that it was very difficult for her to sign off on something as important as a write-off bill without having a full report of the situation in front of her. She said it was her obligation as the elected representative of the people to explain why it was necessary to write off $7 million dollars owed to the government. 

In response to questions from BCN News, the government’s Solicitor General Justin Kamupala explained that this is the second time the Fono Ekepule has had to pass an amendment to the Public Revenues Act to write off unpaid debt owing to the government. The first was in 2007 but in that write off it was for all purposes which meant the government had no other option to recover the debt. 

The amendments passed last month were explicit in the wording ‘for accounting purposes this means that the government may at some point in the future revisit the debt and seek to collect. 

Premier Dalton Tagelagi was adamant in his response to questions raised by Jacobsen, that while this may be the only option available to ensure the government’s books were clear going forward, it is the government’s intention that this write-off doesn’t mean a complete absolution of those debts, if there are people who are still able to and have the resources, the government will seek to collect.

According to the explanatory notes attached to the Bill, ‘The write-off of both the debts and the stated amount of the Government’s investment in the specified entities have been reviewed and is supported by Deloitte, and by Audit New Zealand on behalf of the Auditor General as auditor’.

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